Is Our Hdb Valutation Gonna Stay Or Pegged With Resale Market Even During Downturn?

[Sam Lee Poh Huat 0]

hi people,

Just to tag on this topic cos have some noobie questions abt this valuation thing; Recent paper reports suggest that resale market COV r dropping n there r some owners who r willing to ask for COV as low as 5k..

However, i can still c that some of the less than 10 years old or slightly >10++ years old 5-rm HDB resale AND NEW DIRECT HDB transactions remains at the range of 350k-420k for most mature estate. Not to mention those at "golden-area" like tiong bahru, AMK/redhill etc remains at above 500k for a 5 rm .

So, does that means that due to inflation be it NEW or resale HDB is going to stay at the above mentioned range?? Which means bottomline of a new 5 rm flat has been raise at this level even at the next downturn? Or its gonna b another bishan estate during the early 90's where pple pay more they own then ??

Any humble or professional opinions on this?

Edited April 2, 2008 by FD1976

[zirhk3355 1]

Ok I must qualify first this is a humble opinion, not professional ah...hehe...

From what I know, the valuer also considers the competitive market analysis, which is the transacted prices of similiar properties in the surroundings.

That is also to say, if everything else remain constant (ie the reno, the amenities, exterior facade, etc), then what will affect the value of your flat is how much other people are selling theirs. In other words, there got to be a few 'heroes' to sell at lower prices first then the valuation of your dream flat will come down.

[Sam Lee Poh Huat 0]

Ok I must qualify first this is a humble opinion, not professional ah...hehe...

From what I know, the valuer also considers the competitive market analysis, which is the transacted prices of similiar properties in the surroundings.

That is also to say, if everything else remain constant (ie the reno, the amenities, exterior facade, etc), then what will affect the value of your flat is how much other people are selling theirs. In other words, there got to be a few 'heroes' to sell at lower prices first then the valuation of your dream flat will come down.

thanks for ur prompt n humble opinion.. haha..

I guess there isnt any much such heroes or heroines ards.. esp as a seller pt of views .

But still, my main concerns is.. e.g 20 years back our 5 rm is 50k but now is atleast 400k, n due to inflation or next downturn does it means bottomPRICE of the flats remains??

[zirhk3355 1]

thanks for ur prompt n humble opinion.. haha..

I guess there isnt any much such heroes or heroines ards.. esp as a seller pt of views .

But still, my main concerns is.. e.g 20 years back our 5 rm is 50k but now is atleast 400k, n due to inflation or next downturn does it means bottomPRICE of the flats remains??

What do you mean bottom price? There is no bottom price; even today, there are people selling at below valuation too. So if you are saying is it safe to buy at 400k and hope that it would not drop below 400k, then the answer is no.

Ok I think I used the wrong word 'hero'. It does not take a heroic act to sell the flat at below valuation, and its happening even now at property boom. When comes to selling, there are so many factors, obvious ones are bankruptcy, downgrading, divorce, etc that cause them to sell below valuation.

[Sam Lee Poh Huat 0]

What do you mean bottom price? There is no bottom price; even today, there are people selling at below valuation too. So if you are saying is it safe to buy at 400k and hope that it would not drop below 400k, then the answer is no.

Ok I think I used the wrong word 'hero'. It does not take a heroic act to sell the flat at below valuation, and its happening even now at property boom. When comes to selling, there are so many factors, obvious ones are bankruptcy, downgrading, divorce, etc that cause them to sell below valuation.

Hmmm... ok.. actually let me rephrase myself fm a buyers pt of view.. my concern is that so m i expecting the any future DIRECT 5rm HDB is gonna stay ard 400k when i upgrade? thanks ya.. cos i find it hard to explain why is it that a 5 rm at my area is selling at 400k-500k whereas it cost only less than 300k when direct sales from HDB 7 years back. So inflation the main cause n in general is e selling price from HDB gonna stay regardless if any resale transaction above or below valuation?

haha.. as imply i a noobie hope u guys wld bear with my noobie ques.. thanks again

[zirhk3355 1]

Hmmm... ok.. actually let me rephrase myself fm a buyers pt of view.. my concern is that so m i expecting the any future DIRECT 5rm HDB is gonna stay ard 400k when i upgrade? thanks ya.. cos i find it hard to explain why is it that a 5 rm at my area is selling at 400k-500k whereas it cost only less than 300k when direct sales from HDB 7 years back. So inflation the main cause n in general is e selling price from HDB gonna stay regardless if any resale transaction above or below valuation?

haha.. as imply i a noobie hope u guys wld bear with my noobie ques.. thanks again

Huh you are talking about new flats now? That's totally different from resale market leh.

But anyway, we cannot say that "inflation the main cause n in general is e selling price from HDB gonna stay regardless if any resale transaction above or below valuation". From the buyers' pt of view also, if everyone around the new flat is selling at $300K, would they buy a new flat at $400K?

And sadly, the vice versa is also true: It seemed that new flats' prices will increase also if the resale market is doing well, although it was supposed to be made affordable for first-time buyers. Case in point, my own flat at tanglin halt. First ballot, the price was $200K+ to at most $300K for 4-rm, then 2nd ballot the price are all above $300K! This is within a short period of a few months only...

[Sam Lee Poh Huat 0]

Huh you are talking about new flats now? That's totally different from resale market leh.

But anyway, we cannot say that "inflation the main cause n in general is e selling price from HDB gonna stay regardless if any resale transaction above or below valuation". From the buyers' pt of view also, if everyone around the new flat is selling at $300K, would they buy a new flat at $400K?

And sadly, the vice versa is also true: It seemed that new flats' prices will increase also if the resale market is doing well, although it was supposed to be made affordable for first-time buyers. Case in point, my own flat at tanglin halt. First ballot, the price was $200K+ to at most $300K for 4-rm, then 2nd ballot the price are all above $300K! This is within a short period of a few months only...

hehe.. thanks for e prompt reply again zirhk3355..

As i said.. a noobie ques can be unbearable to understand sometimes .. so bear with me pple

Again, so wif resale pegged to HDB 1ST TIMER DIRECT SALES hv we raise our living standard to a few notches up now, which means selling price of any FUTURE HDB direct sales wld remain as it is now? I rem reading fm papers that a housing agent couple bought a approx 800K flat (cant rem size) at e peak of market in Bishan during early 90's.. they now hv to sell it to a lost of -200k to 300k.

So concern is, wld u buy now (be it resale or direct) noting that its gonna drop value in future? Recent resale transactions suggested otherwise.

[raincole 0]

hehe.. thanks for e prompt reply again zirhk3355..

As i said.. a noobie ques can be unbearable to understand sometimes .. so bear with me pple

Again, so wif resale pegged to HDB 1ST TIMER DIRECT SALES hv we raise our living standard to a few notches up now, which means selling price of any FUTURE HDB direct sales wld remain as it is now? I rem reading fm papers that a housing agent couple bought a approx 800K flat (cant rem size) at e peak of market in Bishan during early 90's.. they now hv to sell it to a lost of -200k to 300k.

So concern is, wld u buy now (be it resale or direct) noting that its gonna drop value in future? Recent resale transactions suggested otherwise.

If you need a house to stay, you will still buy right. The objective is to find one within one's budget and means.

[zirhk3355 1]

Dun worry about being noob lah, everyone was there before. Nothing wrong with asking, only something wrong if dun ask!

Raincole is right; sometimes buying properties is not a matter of investment or calculating 'worthiness' when selling later. Sometimes its emotional, as in really, Really, REALLY love the place so much, must stay at that area, parents/children staying nearby, etc.

Otherwise, why got such transactions like you mentioned, 800K for a bishan flat? Or more recently, all the crazy sales of 700K and 800K+ at membina, toa payoh and queenstown, when the actual valuation of the areas are hovering around 300-400K only?

Remember what does COV stands for? Its CASH OVER VALUATION, meaning you are paying ABOVE what all these professional valuers price the flat for. Why CASH? Because even HDB or the banks are not willing to loan you that amount and they are telling you, "Hello, you 'ji-kei-pou-zhong' and go pay cash yourself hor..." So what does that mean?

It means that for those crazy sales transactions, it just CANNOT be a practical decision to pay like 300K+ or more COV, no matter how cash-rich you are; it must be an emotional decision, as per the abovementioned reasons. Its not a wrong or rash decision, mind you, but just that to this group of buyers, their emotional reasons to buy are as important as our practical reasons.

So frankly, the answer to your question is indeed quite a holy one; ie only God will know lor. Dun fret too much about the future because nobody knows. Just calculate what you can afford and what you like, then buy already. After that, pray hard that some years later, a crazy buyer will come along, love your place so much and pay that 300K+ COV to you lor...hehe...

Edited April 1, 2008 by zirhk3355

[Sam Lee Poh Huat 0]

Dun worry about being noob lah, everyone was there before. Nothing wrong with asking, only something wrong if dun ask!

Raincole is right; sometimes buying properties is not a matter of investment or calculating 'worthiness' when selling later. Sometimes its emotional, as in really, Really, REALLY love the place so much, must stay at that area, parents/children staying nearby, etc.

Otherwise, why got such transactions like you mentioned, 800K for a bishan flat? Or more recently, all the crazy sales of 700K and 800K+ at membina, toa payoh and queenstown, when the actual valuation of the areas are hovering around 300-400K only?

Remember what does COV stands for? Its CASH OVER VALUATION, meaning you are paying ABOVE what all these professional valuers price the flat for. Why CASH? Because even HDB or the banks are not willing to loan you that amount and they are telling you, "Hello, you 'ji-kei-pou-zhong' and go pay cash yourself hor..." So what does that mean?

It means that for those crazy sales transactions, it just CANNOT be a practical decision to pay like 300K+ or more COV, no matter how cash-rich you are; it must be an emotional decision, as per the abovementioned reasons. Its not a wrong or rash decision, mind you, but just that to this group of buyers, their emotional reasons to buy are as important as our practical reasons.

So frankly, the answer to your question is indeed quite a holy one; ie only God will know lor. Dun fret too much about the future because nobody knows. Just calculate what you can afford and what you like, then buy already. After that, pray hard that some years later, a crazy buyer will come along, love your place so much and pay that 300K+ COV to you lor...hehe...

hey zirhk3355 thanks again for ur another prompt reply.. u indeed live up to ur role as our moderator..

Well guess i m another kiasu-kiasi-kaibor singaporean guy who fret for our future n our pockets... and that doesnt help much to the fact that i m my family sole bread winner which somehow trigger to my present mindset of IF "i cant afford now, how can i afford later".

Dont worry, me aint cash rich to speculate like some did or trying to b cash rich by trading off my next house.. jus seeking a reasonable place to upgrade with my parents n future wife.. Also, like what u n raincole reminded me a <AFFORDABLE> comfort zone.. so lets hope my worries r gonna b jus like our property.. raise n cooldown.